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    ADM   GB00B02J6398

ADMIRAL GROUP PLC

(ADM)
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Admiral profit up as insurer draws on cash reserves

08/19/2015 | 03:37am EDT

LONDON (Reuters) - British motor insurer Admiral (>> Admiral Group plc) posted a slim but forecast-beating one percent rise in first-half pre-tax profits on Wednesday, helped by growing customer numbers and the release of reserves held against future claims.

LONDON (Reuters) - British motor insurer Admiral (>> Admiral Group plc) posted a slim but forecast-beating one percent rise in first-half pre-tax profits on Wednesday, helped by growing customer numbers and the release of reserves held against future claims.

The profit of 186.1 million pounds ($291.6 million) came in above analysts' expectations of 163 million pounds, according to a company-supplied consensus forecast, driving Admiral's shares 3 percent higher by 0730 GMT.

Admiral's profits from its UK car insurance business, which provides around 80 percent of its customers, rose 6 percent, mainly as a result of higher releases of reserves set aside to cover the cost of future claims.

Britain's banking and insurance regulator has warned motor and home insurers about the risks of drawing on the reserves they have built up against future claims to boost profits.

Admiral said a positive claims environment meant it was likely to release more reserves in future.

Geraint Jones, Admiral's chief financial officer, told Reuters that the insurer had more than enough reserves.

"Our history shows we are a cautious reserver," adding in a telephone interview that large reserve releases for the insurer were "not particularly unusual".

JP Morgan Cazenove analysts reiterated their underweight rating on the stock, saying that the level of reserve releases "is not sustainable".

The firm's combined ratio fell to 82.7 percent, from 85.1 percent a year earlier.

The combined ratio weighs the amount of money taken in as premiums against that paid out for claims and costs. A level below 100 percent indicates a profit.

Admiral competes with UK rivals including RSA (>> RSA Insurance Group plc), Direct Line (>> Direct Line Insurance Group PLC) and esure Group (>> Esure Group PLC).

Admiral owns UK price comparison site Confused.com and U.S. site compare.com. Its other brands include Elephant, Diamond and Bell.

Jones said Admiral would be looking to expand price comparison sites into international markets, adding that the price comparison model was "quicker to get off the ground" than conventional motor insurance.

Admiral announced earlier this year that chief executive and founder Henry Engelhardt would step down next year, to be replaced by co-founder and current Chief Operating Officer, David Stevens.

Engelhardt will continue to have a role in the company though the exact position was still being worked out, Jones said.

Admiral said it would pay an interim dividend of 51 pence per share, against analyst forecasts of 45.6 pence.

($1 = 0.6382 pounds)

(Reporting by Carolyn Cohn; Editing by Keith Weir)


ę Reuters 2015
Stocks mentioned in the article
ChangeLast1st jan.
ADMIRAL GROUP PLC 0.40% 2891 Delayed Quote.-0.93%
DIRECT LINE INSURANCE GROUP PLC 0.18% 282.4475 Delayed Quote.-11.60%
RSA INSURANCE GROUP 0.00%End-of-day quote.1.00%
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Analyst Recommendations on ADMIRAL GROUP PLC
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Financials
Sales 2021 815 M 1 120 M 1 120 M
Net income 2021 1 028 M 1 413 M 1 413 M
Net Debt 2021 - - -
P/E ratio 2021 8,26x
Yield 2021 10,1%
Capitalization 8 385 M 11 512 M 11 523 M
Capi. / Sales 2021 10,3x
Capi. / Sales 2022 10,5x
Nbr of Employees 11 445
Free-Float 69,7%
Chart ADMIRAL GROUP PLC
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Admiral Group plc Technical Analysis Chart | ADM | GB00B02J6398 | MarketScreener
Technical analysis trends ADMIRAL GROUP PLC
Short TermMid-TermLong Term
TrendsBearishNeutralNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus UNDERPERFORM
Number of Analysts 16
Last Close Price 2 879,00 GBX
Average target price 2 859,63 GBX
Spread / Average Target -0,67%
EPS Revisions
Managers and Directors
Milena Mondini de Focatiis Chief Executive Officer & Executive Director
Geraint Allan Jones Chief Financial Officer & Executive Director
Annette Elizabeth Court Non-Executive Chairman
Charlotte Bennett Head-Information Technology
Matt Wintle Chief Information Officer
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